Report: Binance Controlled Bank Accounts Belonging to Its US Affiliate Between 2019 and 2020
Between 2019 and 2020, crypto exchange Binance controlled bank accounts belonging to its U.S. affiliate including one holding funds of American clients, a new Reuters report has said. According to the report, employees of the crypto exchange’s U.S. affiliate had to get Binance executive Guangying Chen to sign off on payments including payroll.
Binance U.S. Denies Latest Claims
According to a report, Guangying Chen, a senior executive with , was in control of five bank accounts belonging to the crypto exchange’s supposedly independent affiliate Binance U.S. In addition, the report said Chen, who is believed to be one of Binance CEO Changpeng Zhao’s (CZ) close associates, also operated an account holding American customers’ funds.
The report, which cites bank records, said the new revelation of what Chen and her deputies did between 2019 and 2020 undercuts claims that the U.S. affiliate operated independently. To further back the assertion that Binance had at one point near total control of its independent affiliate, the report cites company messages which suggest that employees at Binance U.S. sought Chen’s approval before processing payments to cover things like the firm’s payroll.
In response to the latest claims, Binance U.S. spokesperson Christian Hertenstein insisted that the affiliate has been in complete control of its affairs since the appointment of current CEO Brian Shroder in late 2021. In April, Krishna Juvvadi, Binance U.S. head of legal, similarly rejected claims its parent company had at one point controlled its bank accounts.
However, according to the report, Hertenstein failed to clarify the discrepancy between the time period that he referred to and the one highlighted by Juvvadi.
U.S. Regulators up the Ante Against Binance
The latest claims against Binance and its U.S. affiliate appeared to have coincided with the U.S. Securities and Exchange Commission (SEC) taking legal action against the exchange. According to a Bitcoin.com News report, Binance is facing 13 distinct charges which include the co-mingling of user funds and enabling “high-value U.S. customers” to use its global platform.
The SEC charges also came just over two months after the crypto exchange was sued by the U.S. Commodity Futures Trading Commission (CFTC) for allegedly violating several trading and derivatives rules. As reported by Bitcoin.com News in late March, the U.S. regulator said Binance and CZ had committed the infractions since 2019.
Meanwhile, the Reuters report said communications between executives at Binance U.S. and Chen suggested that the former were worried about how American regulators would view the control structure which remained in place until early 2021. In one instance, an unnamed Binance U.S. executive is said to have told one of Chen’s deputies to consider giving BAM Trading — an entity controlled by CZ — separate control.
“I think it makes sense BAM has its own login for the regulatory perspective,” the unnamed executive reportedly said.
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https://news.bitcoin.com/report-binance-controlled-bank-accounts-belonging-to-its-us-affiliate-between-2019-and-2020/
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